How Property Fraud Impacts Buyers, Sellers, and Renters - And What Estate Agents Must Do to Mitigate Risk

When property fraud is discussed, it’s often in terms of it being a problem for the consumer. However, there are worries for all involved - buyers are worried about losing deposits, sellers worry about impersonation, renters worry about fake listings, and bogus landlords and estate agents have some huge concerns with operational, compliance and reputational risks.

This is such a concern as the UK property sector is still highly exposed to financial crime, with estate agents having some of the highest exposure. Meaning that, whilst buyers, sellers and renters feel that direct impact is affecting them, agencies are having to ask what they should be doing to stop illicit activities from getting through.

Why property fraud is bigger than a consumer issue

When looking at this from a consumer perspective, fraud means lost money, delayed moves and emotional stress. Clearly, this is an important issue for the consumer; however, agents also have to deal with disrupted transactions, failed compliance checks, damage to client relationships, and, of course, intense scrutiny if warning signs have been missed along the transaction. 
This is no longer a task that can be left to conveyancers or consumers, as agents are increasingly being expected to be the first line of defence. This involves carrying out customer due diligence, business risk assessments, training staff and keeping clear records that can prove compliance and reduce the risk of property scams in the UK.

How fraud affects buyers, sellers and renters

One of the most damaging risks for buyers is diversion fraud, with the National Crime Agency reporting that from April 2024 to March 2025, there were 143 reports of criminals intercepting transactions and redirecting funds by impersonating solicitors or agents, averaging with a loss of £82,000. In events such as these, brand trust suffers, even if an agency isn't directly responsible.

The greatest risk for sellers is impersonation, with the HM Land Registry defining property fraud as criminals pretending to be the owner to sell or mortgage a property without their knowledge. It’s estimated that from April 2023 to March 2024, the registry stopped 97 registered title fraud attempts on properties with a combined worth of £58 million. In cases such as this, a transaction can be derailed, leaving an agency facing difficult questions. For those owners who live overseas or who rent out a property, they will find themselves particularly exposed.

The vulnerability for renters is urgent. The rental market moves fast, and fraudsters can take advantage of this, with Action Fraud warning they may pose as landlords and request deposits before any viewing has even taken place. They may even falsely claim that funds will be protected under a tenancy deposit scheme. Financial losses may be smaller than in purchase fraud, but the impact this can have, the lost savings, missed housing and opportunities, can be huge. Letting agents also became subject to OFSI financial sanctions reporting obligations from May 2025, marked under "relevant firms", which has tightened the compliance picture further.

What agents are now expected to do

It used to be that a passport check was seen as sufficient protection against fraud; however, this is no longer sufficient with the HMRC requiring businesses to:

• Identify and verify customers

• Understand the purpose of transactions

• Identify who is to benefit 

• Make sure checks are sufficient for the risk involved

  
  It’s worth remembering that many modern frauds don’t sit neatly in one box - a fake seller could also raise concerns with identity fraud, a suspicious payment route can raise a fraud red flag, but also a source of funds concern. Strong compliance means Know Your Customer (KYC), Customer Due Diligence (CDD), continuous monitoring, sanctions screening and regularly updated record-keeping, working together to form a strong resistance to property fraud in the UK.

Seven practical steps for agents to help protect against fraud

1. Verify identity properly. Checks should be able to confirm that documents are genuine and that the document holder is the legitimate owner of them. The use of digital identity verification helps with this by improving speed, consistency and auditability compared to usual manual processes.

2. Treat instructions as risk events. If any instruction is treated as a point of exposure, rather than just a sales opportunity, this will help to add a further layer of protection. Make sure close attention is paid to the ownership position, occupancy status, overseas links and any possible mismatch between the person instructing and the registered owner profile.

3. Embed sanctions screening into onboarding. Sanctions risk is a risk for all businesses and is not something that is limited to banks and law firms. Manual screening introduces more chances of human error, with digital checks adding more security to the process. It’s also important to ensure that sanctions checks sit within a wider due diligence and risk-assessment process and are not just a standalone step.

4. Train staff to recognise red flags. When fraud prevention is most likely to fail is when it lives only in policy documents, which is why all front-line teams need to be trained to understand the practical warning signs, including:

• Rushed instructions

• A reluctance to provide documents

• Unusual payment explanations

• Third-party involvement with no clear reason

• Pressure to bypass the process
  
  

5. Keep monitoring beyond onboarding. Regular monitoring is essential as risk doesn't stop once a file is opened. A transaction that may have looked ordinary at the instruction stage can become something to look at if the funding route changes, a new party is introduced or there is a shift in communication patterns.

6. Maintain a strong audit trail. It’s important to remember that record-keeping is as much a defensive tool as a compliance requirement. HMRC requires businesses to retain their records of due diligence, risk assessments, policies and training that have taken place for five years. If needed at any point, agencies should be able to show not just that checks were made, but exactly what was checked, if anything was flagged and what the end decision was.

7. Escalate and report when necessary. HMRC requires estate agencies to submit a Suspicious Activity Report to the NCA as soon as possible if they know or suspect that money laundering or terrorist financing has taken place.

Property fraud in the UK should no longer be viewed as a side issue that only affects unlucky consumers. It is a live business risk that can have the effect of disrupting transactions, triggering compliance concerns and undermining trust across both sales and lettings alike.

Buyers, sellers and renters all feel the damage differently; however, increasingly, agents carry the responsibility to spot the warning signs and to act before fraud can become a loss. Stronger verification and joined-up compliance are becoming what it takes to be a professional agent.

Here at SmartSearch, our digital identity verification and AML solutions help estate and letting agents reduce the risk of property fraud at every stage of the customer journey. By combining fast identity checks with sanctions screening, ongoing monitoring, and clear audit trails, we help agencies detect red flags earlier, protect buyers, sellers and renters, and strengthen compliance without slowing transactions down. If you’re looking to improve your fraud prevention processes and build a more secure, trustworthy agency, request a free demo today or contact our team for more information.